Q. Can a Muslim who is in debt be helped to pay of his debt with Zakaat? What if such a person has a house, car, jewellery, investments etc., can he/she still be helped to pay his/her debts with Zakaat money?
A. In principle, if the debts of a person are equivalent to his/her surplus assets or more than that, he/she is entitled to accept Zakaat. Likewise, if his/her surplus assets are sufficient to clear his/her debts but after paying his/her debts, his/her remaining assets do not exceed the quantum of Nisaab, he/she can also receive Zakaat. As an example, if Zaid’s surplus assets are valued at R100 000 and his debt total is R100 000 or R150 000, Hamzah can assist Zaid with Zakaat.
However, if his/her surplus assets are such that even after clearing all his/her debts, they are equivalent to or more than the quantum of Nisaab, he/she cannot receive Zakaat. As an example, if Zaid’s surplus assets are valued at R100 000 and his debt total is R90 000, Hamzah cannot assist Zaid with Zakaat. (The Zakaat Nisaab in South Africa is R4549.83 as of 05/07/2018)
The term “surplus assets” includes money and all those goods and property which are not required for ones day-to-day needs.
As such, a house and car are required on a day-to-day basis and are not regarded to be ones surplus assets, which will not be taken into consideration in determining ones Zakaat eligibility. On the other hand, jewellery and investments are regarded to be ones surplus assets, which will be taken into consideration in determining ones Zakaat eligibility. (Shaami 2/339)
Allah Ta’ala Knows Best
Mufti Ismaeel Bassa